Coronavirus Tax Relief & Resources for Nonprofits
Is Your Nonprofit Organization Looking for IRS Guidance Regarding COVID-19?
The IRS has established a special section on its website focused on steps to help taxpayers, businesses, including nonprofit organizations, and others affected by the coronavirus. The IRS will update the webpage as new information is available. The IRS provides various news releases and guidance regarding the coronavirus.
Stimulus and Tax Breaks for Nonprofit Organizations
A coalition of 30 national nonprofits and charity advocacy groups sent a letter to Congress urging lawmakers to include nonprofits in any stimulus package enacted in response to the coronavirus outbreak. Signatories on the letter include the American Red Cross, Girl Scouts, Boys & Girls Clubs of America, and Feeding America.
"Nonprofits must be expressly included in tax and other relief targeted to small businesses," the letter states.
The letter also urges lawmakers to provide increased funding to help nonprofits like food banks and shelters, where the demand for services may increase.
"Most nonprofits don’t have endowments or even large rainy-day funds to tap," said Tim Delaney, CEO of the National Council of Nonprofits, one of the signatories on the letter. "Too often, legislation turns an inadvertent blind eye to nonprofits, not factoring in that they cannot tap certain tax credits or deductions."
The letter also calls for Congress to boost giving by enacting a temporary "universal deduction" for all taxpayers, regardless of whether they itemize, to get a tax break for giving "to nonprofits responding to, or suffering from, the coronavirus."
Nonprofits have long sought a universal deduction, especially since the tax law of 2017 roughly doubled the standard deduction.
The Coronavirus Preparedness and Response Supplemental Appropriations Act
The Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 (P.L. 116-123) (the “Act”), which passed with near unanimous support in both the House and Senate, was signed into law by the President on March 6, 2020. The bill provides $8.3 billion in emergency funding for federal agencies to respond to the coronavirus outbreak. Of the $8.3 billion, $6.7 billion (81%) is designated for the domestic response and $1.6 billion (19%) for the international response.
Stimulus for Affected Businesses – Including Nonprofit Organizations – as part of the Act
The initial emergency supplemental included $1 billion in loan subsidies for small businesses, small agricultural cooperatives, small agricultural producers, and nonprofit organizations that have incurred financial loss as a result of the coronavirus outbreak. In addition, the President is currently working with top economic officials to follow this with a fiscal stimulus package. The centerpiece of the package is a temporary tax cut, with infrastructure spending and paid leave in the mix. It is important to note the Administration has not requested the social security and/or payroll tax cut.
Additional Resources Regarding COVID-19
The Hill will react to an economic stimulus by focusing assistance to workers dislocated by business closings. Also look for free testing, expanded food stamp assistance, paid sick leave, and extended unemployment insurance to name a few issues on the table.
Other information about actions being taken by the U.S. government is available at https://www.usa.gov/coronavirus and in Spanish at https://gobierno.usa.gov/coronavirus. The Department of Treasury also has information available at Coronavirus: Resources, Updates, and What You Should Know.
For additional information about the COVID-19 virus, you should visit the Centers for Disease Control and Prevention (CDC) (https://www.coronavirus.gov) for health information.
Have Questions Regarding Your Tax-Exempt Organization? We can help!
If you are a tax-exempt organization and have questions, attorney Jonathan Grissom can help.